GLOSSARY
Abstract of Title
A history of the ownership of a parcel of land which lists transfers of title, rights, and liabilities.
Acceleration Clause
States that upon default, all of the principal installments come due immediately.
Accrued
An accumulation.
Acknowledgment
A formal declaration made by the grantor conveying the property to the grantee – a necessary element for validity of a deed.
Acre
A measure of land equal to 43,560 square feet.
Actual Notice
The actual knowledge that a person has about the existence of a particular fact.
Acquisition – Adquisicion
The process of taking title to or ownership of something.
Adjustable-rate Mortgage (ARM)
A mortgage in which the interest changes periodically, according to corresponding fluctuations in an index. All ARMs are tied to indexes.
Ad Valorem A prefix meaning "based on value". Most local governments levy an ad valorem tax on property. Adverse Possession – Prescripcion Positiva A method of acquiring original title to property by open, notorious and hostile possession for a statutory period of time; also referred to as prescription.
Agency relationship in which one party (the principal) authorizes another party (the agent) to act as the principal's representative in dealing with third parties. Agent - Apoderado
One who acts for and in place of a principal for the purpose of affecting the principal's legal relations with third persons.
Agreement - Convenio
A manifestation of mutual assent on the part of two or more persons as to the substance of a contract.
Air Rights
The right to use, control and occupy the space above a particular parcel of land.
Alienation Clause
A provision in a mortgage requiring full payment of the debt upon the transfer of title to the property, due on sale. Prevents loan assumptions.
Amortization
The repayment of a financial obligation over a period of time in a series of periodic installments. In a level-payment mortgage, this is the portion of the debt service that reduces the principal.
Amortized Loan
A financial debt that is paid off over a period of time by a series of periodic payments. A loan can be fully amortized or partially amortized or partially amortized requiring a balloon payment to satisfy the debt at the end of the term.
Annual Percentage Rate (APR)
The yearly cost of credit. Interest Rate plus finance charge.
Apostille
The authentication of a document to be used in a foreign country, which certifies the signature and the position of the official who has executed, issued or certified the document. It insures that public documents issuedin one country will be recognized as valid in another country.
Appraisal – Valoracion, Avaluo
An opinion or estimate of value to determine what a property would sell for in the current market place.
Appraiser – Perito Valuador
A person selected or appointed by competent authority or interested party to make an appraisement.
Appreciation
An increase in value.
Appurtenance
Any right or privilege which belongs to and passes with land.
Arms-length Transaction
Occurs between willing buyer and willing seller with each party completely knowledgeable about the market. A purchaser of property between relatives (father & son) would not be an "arms length transaction".
Arrears
Not on time; late in making payments or completing work. Interest is paid in arrears. Taxes are paid at the end of the year, i.e., in arrears.
As is
A phrase which disclaims any promises or warranties. A person purchasing real estate "as is" takes it in exactly the condition in which it is found. Seller cannot hide latent defects.
Assemblage
Bringing two or more lots together under one ownership.
Assessed Value – Valor Catastral
The value placed on property, by the tax assessor, for the purpose of determining the property tax.
Assessment
The placing of a value on property for the purpose of taxation. Assignment - Contrato de Derechos Fideicomisarios (1) the means by which a person transfers contract rights;(2) occurs when the lessee parts with the entire estate, retaining no interest; (3) assignment of real estate trust rights. Assignment of Beneficial Interest – Cesion de Derechos The assumption of the beneficial rights under a trust from one party to the other, wherein the buyer assumes the remaining balance of years left in the Fideicomiso. Assumable Mortgage
A mortgage that can be assumed by the buyer when a home is sold. Usually, the borrower must "qualify" in order to assume the loan. Assumption
The term applied when a buyer assumes the seller’s mortgage.
Attachment
The process of taking a person's property into legal custody by a court order called a writ of attachment. Property is frozen.
Attestation
The act of witnessing a person’s signing of an instrument by a notary public.
Attorney in Fact
A person given the authority to act on behalf of another under a power of attorney. Attorney at Law – Abogado O Licenciado en Derecho
Person admitted to practice law in his respective state and authorized to perform both civil and criminal legal functions for clients, including drafting of legal documents, giving of legal advice, and representing such before courts, administrative agencies, boards, etc.
Attorney's Opinion of Title
A statement issued by an attorney after analyzing an abstract as to quality of title.
Bad Title
Title with defects making it unmarketable.
Balloon Payment
The remaining balance, at maturity, on a loan that has not been completely repaid through periodic payments. Once paid, the outstanding balance is zero. Partially amortized loan.
Bench mark
A bronze disk permanently placed and precisely identified by government survey teams.
Beneficiary – Beneficiario, Fideicomisario
The recipient of trust income, benefit plan, or gifts in a will.
Bilateral Contract
A contract in which a promise is given for the promise of another. It becomes binding when mutual promises are communicated. (A real estate contract).
Bi-weekly Mortgage
A mortgage in which you make payments every two weeks instead of once a month. The basic result is that instead of making twelve monthly payments during the year, you make thirteen. The extra payment reduces the principal, substantially reducing the time it takes to pay off a thirty year mortgage. Note: there are independent companies that encourage you to set up bi-weekly payment schedules with them on your thirty year mortgage. They charge a set-up fee and a transfer fee for every payment. Your funds are deposited into a trust account from which your monthly payment is then made, and the excess funds then remain in the trust account until enough has accrued to make the additional payment which will then be paid to reduce your principle. You could save money by doing the same thing yourself, plus you have to have faith that once you transfer money to them that they will actually transfer your funds to your lender
Bill of Sale
A document used to transfer ownership of personal property.
Blanket Mortgage
A mortgage which covers more than one piece of real estate. Often used by a developer in the financing of undeveloped lots. Contains a partial release clause.
Block A
Means of subdividing large tracts of land into smaller sections, each of which is numbered. For example, Lot 4, Block 8.
Blockbusting
Any activity which attempts to drive prices down for the purpose of causing transition from one ethnic group to another.
Borrower – Prestatario
The person receiving funds from another with the intention of repaying
Bounds
Refers to boundaries; used with the word "metes" in the metes and bounds method of land description.
B reach of Contract
A failure to perform, as promised, at the time the performance was due.
Broker – Corredor
An intermediary who brings parties together for specific purposes. A mortgage broker brings borrowers together with lenders; a real estate broker brings purchasers together with vendors. Often charges a percentage of the contract price as a fee. Specific training required to become a Real Estate Broker, a professional designation.
Budget – Presupuesto
The amount of money that is available for, required for, or assigned to a particular purpose.
Building Code
Ordinances passed by local governments with special minimum standards of construction for new buildings. They also apply to major additions to old construction.
Building Permit – Manifestation de Construcion
A document granting permission for construction.
Bundle of Rights
The rights of an owner to possess, control, enjoy, sell, lease, mortgage, and dispose of the property.
Buyer – Comprador
A person that acquires possession, ownership, or rights to the use or services of by payment especially of money.
Bylaws
Legal documentation in a condominium regime which provides the establishment of the home-owner's association; provides the powers and authority given to the board of directors; and indicates various rights and responsibilities of the unit owners.
CC & R’S Covenants, Conditions, and Restrictions – Estipulaciones, Condiciones y Restricciones
Which are the rules of general application governing the relations between land owners in a specific subdivision, development, condominium development or cooperative housing facility. May be registered on title.
Capital Gains Tax – Impuestos Sobre la Renta
The tax profit realized from the sale of property.
Capitalization
Used in the income approach to value. To capitalize income means to convert future income into present (current) value.
Capitalization Rate
The rate of interest considered to be a reasonable return on investment - given the risk.
Cash-out Refinance
When a borrower refinances his mortgage at a higher amount than the current loan balance with the intention of pulling out money for personal use, it is referred to as a "cash out refinance."
Caveat Emptor
Means "Let the Buyer beware".
Certification – Certificacion
The formal assertion in writing of some fact.
Certificate of No Lien – Libre de Gravamen
The document from the Public Registry office certifying there are no liens against the property.
C ertificate of No Tax Liability – Certificado de no Adeudo
The document from the Public Registry office certifying there is no tax liability against the property.
Chain of Title
A history of the ownership affecting title to a parcel of land.
Charges – Cargas
The price demanded for something.
City Council – Ayuntamiento
The duly elected body of local government that oversees the municipality, rules, regulations and ordinances.
City Planning
The effort on the part of the city to coordinate, direct and control the type of development taking place, so as to ensure maximum benefits to the populace.
Calvo Clause
The agreement before the Ministry of Foreign Affairs to consider foreigners as nationals and not to invoke the protection of their governments in matters relating thereto: under penalty, in case of non-compliance with this agreement, of forfeiture of the property they had acquired to the benefit of the nation.
Closing – Firma de Escritura de Compraventa
The act of making a transaction complete.
Closing Costs – Costos del Cierre de la Operacion
Monies expended by a party in completing a transaction, over and above the purchase price, including: legal fees, taxes, mortgage application charges, interest adjustments, registration fees, appraisal fees, etc.
Cloud on Title
Any claim affecting title to property.
Collateral
Property which has been pledged as security for a loan.
Co-ownership – Copropiedad
Property owned by more than one person.
Color of Title
Adverse possession.
Commingling
Illegally mixing deposits or monies, collected from a client, with one's personal or business account. Taking money out too soon or putting it into escrow too late (10 banking days).
Commitment - Compromiso
An agreement or pledge to do something in the future.
Common Area Assessments
In some areas they are called Homeowners Association Fees. They are charges paid to the Homeowners Association by the owners of the individual units in a condominium or planned unit development (PUD) and are generally used to maintain the property and common areas.
CommonElements Property Propertyjointly owned on a pro-rata basis with other unit owners in a condominium regime. Common Land – Ejido System of communal ownership of agricultural land.
Community Property
Any property acquired in certain by purchase, or as compensation by either spouse during the period of marriage, is considered to be owned in an undivided half interest by each.
Comparable
Comparable property recently sold which is used in the market data approach.
Comparative Analysis
A method of appraising property in which the selling prices of similar properties are used as the basis for estimating the value of the subject property.
Compensation – Compensacion
To offset an error, defect, or undesired effect.
Competent Parties
Those who are legally capable of entering into contracts.
Condemnation
The process of exercising eminent domain through court action.
Condition – Condicion
Clauses in the agreement that must be fulfilled before the Agreement becomes firm and binding. If the condition is not fulfilled, the Agreement will usually become null and void and any deposit paid returned to the Purchaser.
Condominium Regime– Condominio Regme
A Condominium regime is a Mexican legal Notary Public document that is not legally obtainable until construction is complete.
Consideration
Anything of value offered to induce someone to enter into a contractual agreement. For example, sale price, earnest money, a promise for a promise.
Constructive Eviction
Occurs when the tenant's use of the premises is substantially disturbed or interfered with by the landlord's actions or failure to act where there is a duty to act. The tenant is effectively forced to move out and terminate the lease without further liability for further rent.
Constructive Notice
The knowledge that the law presumes a person has about a particular fact irrespective of whether the person knows about the fact or not. (Recording).
Consumer – Consumidor
An individual or corporation that acquires or enjoys property, products or services as the end-user.
Consumer Protection Agency – Procuraduria Federal del Consumidor (PROFECO)
An Agency which functions are to promote and protect consumer rights and to procure equity and legal certainty between consumers and commercial suppliers.
Contingency
A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.
Contract – Contrato A legally enforceable promise or set of promises that must be performed and for which, if a breach of the promise occurs, the law provides a remedy. A contract may be either unilateral, by which only one party is bound to act, or bilateral, by which all parties to the instrument are legally bound to act as prescribed.
Contract for Deed means by which the seller passes possession but retains title to the property until the total or a substantial portion of the purchase price is paid. Installment contract. The two parties here are the vendor (owner) and the vendee (buyer). Convertible ARM
An adjustable-rate mortgage that allows the borrower to change the ARM to a fixed-rate mortgage within a specific time.
Conveyance
The transfer of title to land from one party to another.
Cooperative
A form of property ownership in which a corporation is established to hold title in property and to lease the property to shareholders in the corporation. Own stock.
Corporation – Sociedad Anonima
An entity or organization, created by operation of law, whose rights of doing business are essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures.
Corredor Publico
A attorney who is a particular expert in rights, specialized in mercantile and economic-financing matters with a high grade of professional and moral quality, to whom the Mexican government rants the functions of a public fedatario, valuator expert, juristic assessor, arbiter, mediator agent and all the other functions pointed out by the Ley Federal de Correduria Publica and other laws or rules.
Cost Approach
A method of estimating value based on the economic principle of substitution; the value of a building cannot be greater than the cost of purchasing a similar site and constructing a building of equal utility.
Counteroffer
An implied rejection of the original offer by proposing new offer or by making conditional acceptance.
Covenant – Estipulacion
A legal assurance or promise in a deed or other document, or implied by law.
Curable Depreciation
Depreciation is considered curable if the cost of the repair is less than what the repair adds to the value of property.
Debit
Money owed. (Debt)
Decree
Court order
Deed – Cesion
A signed and seal instrument containing some legal transfer.
Deed of Trust – Escritura Publica, Escritura de Fideicomiso
A written instrument, usually under seal, which contains an agreement to transfer some property interest from a grantor to a grantee.
Deed of Release
Given by lien holders, remainder-men or mortgages to relinquish their claims on the property.
Deed of Trust - Fideicomiso
A deed to real property, which serves the same purpose as a mortgage, involving three parties instead of two. The third party holds naked title for the benefit of the lender. Beneficiary (Lender), Trustor (Borrower), Trustee (Third Party) Fideicomiso.
Defeasible Fee Simple
- Or FEE SIMPLE DEFEASIBLE - Ownership with conditional restrictions which, if broken, can result in title to the property reverting back to the grantor or his heirs.
Defect in Title – Vicios en Titulo
Any lien, claim or encumbrance, on a particular piece of real estate, that has been properly recorded in the public records. Recorded defects impair clear title and may result in the title being unmarketable.
Deposit – Deposito, Arras
The money paid up-front by a purchaser as security for completing the transaction. Also known as "good faith money" or "earnest money". An instrument which is not registered on title but placed in the records for a given piece of land for information purposes.
Depreciation
A decrease in value due to physical deterioration, functional or economic obsolescence.
Descent
Refers to any passage of title to property, upon intestacy to those heirs, related by blood or marriage, whom the law designates.
Devise
Transferring title to real property by means of a will.
Developer – Desarrollador
One who attempts to put land to its most profitable use through the construction of improvements.
Development - Desarollo
A developed tract of land.
Disbursement Instructions – Instruciones Referente a la Distribucion Acordadas Entre el Venedor y el Comprador
The document giving notice on the manner in which funds will be paid out.
Disclosure – Declaracion
A statement to a potential buyer listing information relevant to a piece of property, such as the presence of radon or lead paint.
Disclosure Statement – Documento de Declaracion
This document provides information concerning the current physical, legal and economic condition of the property.
Discount Points
A fee charged by the lender at settlement that results in increasing the lender's effective yield on the money borrowed. One discount point equals one percent of the loan amount.
District Attorney – Ministerio Publico
The legally elected attorney for a specified area.
Dominant Estate
The tract of land in an easement appurtenant which benefits from the easement.
Down Payment The amount paid by the purchaser, which when added to the mortgage amount, equals the total sales price. At time of closing this is referred to as equity.
Due Diligence – Diligencia Debida
Such a measure of prudence, activity, or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent man under the particular circumstances; not measured by any absolute standard, but depending on the relative facts of the special case.
Due-on-Sale Clause
A clause, included in many mortgages, permitting the lender to require the borrower to repay the outstanding balance when the property is sold. Prevents loan assumption.
Duration – Plazo
The time during which something exists or lasts.
Duress
Involves the use of force or improper actions, against a person or property, in order to induce a party to enter into a contract.
Duty – Obligacion
Obligatory tasks, conduct, service, or functions that arise from one's position (as in life or in a group).
Earnest Money – Depositos condicionales
A sum of money given to bind an offer or agreement.
Easement - Servidumbre
A right to limited use or enjoyment by one or more persons in the land of another.
Easement Appurtenant
An easement created to benefit adjacent land.
Easement by Implication
Occurs because of necessity, such as the conveyance of a land-locked property.
Easement in Gross
A personal right to use the land of another.
Economic Life
The time period over which an improvement to land earns more income than the cost incurred in generating the income. Profitability.
Emblements
Refers to crops which require annual planting.
Economic Obsolescence
A loss in value due to factors outside the subject property, such as changes in competition or surrounding land use. Also referred to as external obsolescence.
Economic Rent
The amount of rental which a building would receive, if set by the market, as opposed to contract rent set by the lease.
Effective Age
The difference between the theoretical economic life of a structure and its actual remaining economic life. Maintaining the property.
Effective Gross Income
Income received from property before the deductions for operating expenses; also called gross income. Gross Income minus vacancy.
Eminent Domain
The right of government to acquire property, for a public purpose, after paying just compensation.
Encroachment
The extension of some improvement or object across the boundary of an adjoining tract. (Off sides).
Encumbrance
Any interest in or claim on, the land of another, which in some manner burdens or diminishes the value of the property.
Equitable Lien
Created when justice and fairness would require a court of equity to declare such a lien exists or when conduct of parties would imply that a lien was intended.
Equity
value of real estate less any liens against it.
Escalation Clause
(1) in finance, permits the lender to raise the interest rate upon the occurrence of certain stipulated condition, (2) in leasing, permits the lessor to raise lease payments upon the occurrence of certain stipulated condition.
Escheat
The right of government to ownership of property, which is left by a deceased property owner who leaves no will, and dies without descendants.
Escrow – Cuenta en Plica, Cierre de Plica
The deposit of funds with a neutral third party who is instructed to carry out the provisions of an agreement.
Escrow Instructions – Instruciones del Escrow Referrente Alacuenta de Deposito en Garantia
The document containing instructions and held in trust by a 3rd party to be turned over to the grantee upon fulfillment of a condition.
Estate
A legally recognized interest in the use, possession, control and disposition that a person has in land, and defines the nature, degree, extent and duration of a person's ownership in land.
Estate at Sufferance
Retention of possession without the consent of the landlord after the lease has expired; also referred to as tenancy at sufferance.
Estate at Will
An occupation of space, for an indefinite period, which can be terminated by either the lessor or lessee at any time. Also referred to as tenancy at will.
Estate for Years
A conveyance of realty for a definite stated period of time. The term may be one year, one month, one week or even one day. No notice needed to terminate.
Estate from Period to Period
A leasehold, which is automatically renewed for the same term as in the original lease; also referred to as a periodic tenancy or an estate from period to period. Month to month rental. Notice needed to terminate.
Estate in Fee
The maximum possible estate one can possess in real property; also referred to as fee simple or fee simple absolute.
Exchange (Real Estate) – Cesion
The act of giving or taking one thing in return for another.
Exclusive Agency Listing
The owner employs only one broker but retains the right to personally sell the property, and thereby not pay a commission. However, if any other real estate company sells the property, the listing broker is still entitled to the commission stipulated.
Exclusive Right to Sell Listing
Under this listing arrangement, the broker employed is entitled to a commission no matter who sells the property during the listing period. (Even the Seller)
Executed Contract
One in which the obligations have been performed on both sides of the contract and nothing is left to be completed. (Closed Deal)
Executor
A person appointed in the will to carry out the instructions of the testator, pay the debts of the estate, and dispose of the property as instructed.
Expenses – Gastos
A financial burden or outlay to secure a benefit or bring about a result.
Express Contract
An agreement formed through the oral or written words of the parties.
401(k)/403(b)
An employer-sponsored investment plan that allows individuals to set aside tax-deferred income for retirement or emergency purposes. 401(k) plans are provided by employers that are private corporations. 403(b) plans are provided by employers that are not for profit organizations
401(k)/403(b) loan
Some administrators of 401(k)/403(b) plans allow for loans against the monies you have accumulated in these plans. Loans against 401K plans are an acceptable source of down payment for most types of loans.
Factura An official receipt
Fair Market Value The price negotiated for a parcel of real estate in a competitive market where both buyer and seller are free to act and under no undue pressure. Federal Maritime Land Zone – La Zona Federal Maritimo Terrestre Refers to that part of federally owned beachfront property that extends out from the beach. The Mexican nation owns this property and it cannot be sold or owned by Mexicans or foreigners.
Fee Simple Absolute
The maximum possible estate one can possess in real property; also referred to as fee simple or fee.
Fees – Honorarios
A sum paid or charged for a service
Fiduciary
A person who essentially holds the character of trustee. A fiduciary must carry out the duties in a manner which best serves the interest of the party for whom the fiduciary relationship is established. A real estate licensee has a fiduciary duty to his/her client. (Seller, landlord, buyer or tenant).
Financial Statement - Estado Financiero
A document which sets out the assets, income, expenses and debts of a person or company to allow a third person to assess that person or corporation's financial health (i.e. when considering lending money to that person or corporation).
First Lien
Claim with highest priority against property; also known as a superior to the rights of subsequent lenders. (Recorded first)
First Mortgage
A mortgage on real estate in which the lender's rights are superior to the rights of subsequent lenders. (Recorded first)
Fixture
Broadly defined as personal property which has become realty. Examples include built-in cabinets or bathtubs.
Foreclosure
A legal procedure to levy on pledged property used to secure a debt under a mortgage or other lien.
Fraud
A misrepresentation of a material fact, which is made with knowledge of its falsity, and with intent to deceive a parry who in fact relies on the misrepresentation to his or her detriment and injury.
Freehold Estate
One which continues for an indefinite period of time. For as "least a lifetime or greater" (will)
Fully Amortized Mortgage
A method of loan repayment in which the dollar amount of each payment is the same. The first part of each payment is interest and the remainder reduced the principal. Over the life of the mortgage, the outstanding balance is reduced to zero.
Functional Obsolescence
A loss in value due to conditions within the structure which make the building outdated when compared with a new building. (4 bedrooms and 1 bath, insulation, narrow stairway, etc.)
General Agent
One authorized to transact all of the principal's affairs within the context of a broad commercial or other kind of endeavor. Property manager.
General Lien
A lien that attaches to all property owned by an individual. Real and personal.
Good Title
One which is free from encumbrances such as liens, pending litigation and other such defects.
Graduated Lease Provisions
This lease provides for periodic step increases in the rental payments.
Graduated Payment Mortgage (GPM):
A new financing technique for residential real estate in which monthly payments start at a lower rate and increase periodically over the life of the mortgage; FHA 245.
Grandfather Clause
Creating an exemption from application of a new law due to previously existing circumstances; non-conforming use.
Grant
Transferring real estate by means of a deed.
Grantee - Cesionario
Purchaser or donee receiving title to property.
Grantor - Otorgante
Owner making conveyance of title or interest in property.
Gross Income
The actual income received from property before the deduction for any expenses.
Gross Income Multiplier (GIM)
A method of appraising income-producing property based on a multiple of the annual gross income; also called a gross rent multiplier.
Gross Rent Multiplier (GRM)
A method of appraising single family or duplexes based on the monthly gross income.
Guarantee – Aval
An assurance for the fulfillment of a condition
Highest and Best Use
The legal use of a parcel of land, which when capitalized, will generate the greatest net present value of income. The first thing an appraiser should determine.
Home Inspection
A thorough inspection by a professional that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included as a contingency by the purchaser.
Homeowner Association (HOA) – Asociacion de Conduenos A group that governs a subdivision, condominium, or planned community. The association collects monthly fees from all owners to pay for common area maintenance, handle legal and safety issues, and enforce the covenants, conditions, and restrictions set by the developer.
Hypothecate A process of pledging something (house) as security, but retaining possession of it. Immobility
Incapable of being moved; fixed in location, such as land.
Implied Contract
contract formed through the acts or conduct of the parties. involved.(Ostensible)
Income Approach
A traditional means of appraising property based on the assumption that value is equal to the present worth of future rights to income.
Increasing and Decreasing Returns
This economic principle states that the addition of more factors of production will add higher amounts to new income up to a certain point, which is the point where the maximum value of the asset has been reached; any further addition of factors of production will do nothing to increase the value.
Incurable Depreciation
Elements of a structure which are neither physically possible nor economically feasible to correct.
Independent Contractor
One whose time and effort are regulated by the individual and are not under the direction or control of others.
Index Lease
The rental is tied to some commonly agreed to price index such as the Consumer Price Index or the Wholesale Price Index.
Inheritable
An interest in land which can be passed to a relative upon the death of the owner.
Inheritance – Succesion
The act or process of becoming entitled as a legal beneficiary to the property of a deceased person, as well as to the rights and obligation sthat are not extinguished upon death.
Installment Land Contract – Contrato de Abonos
See Land Contract
Insurance – Seguro
Owners and buyers can purchase various types of insurance including hazard, private mortgage, and earthquake. The policies guarantee compensation for specific losses
Interest - Intereses
(1) the sum paid for the use of money (2) the degree of rights in the ownership of land.
Interest Rate – Tipo de Interes
The cost of using money expressed as a percent per period.
Intestate
Dying without a will.
Invalid
Without legal force.
Irrevocable
Not capable of being changed or terminated.
Joint Tenancy
A form of concurrent ownership, which occurs when two or more persons own a single estate in land, with right of survivorship. Must have equal shares, right to partition.
Joint Venture
An agreement by two or more individuals or entities to engage in a single project or undertaking.
Judgment Lien
The charge upon the land of a debtor, resulting from the decree of a court, entered in the judgment docket. Lawsuit
Junior Lien
An encumbrance, second in priority, to a previously recorded lien or to a lien to which the encumbrance has been subordinated.
Land – Terreno
A portion of the earth's solid surface distinguishable by boundaries or ownership.
Land Contract
The seller accepts a down payment on a parcel of land but title to the property does not pass until the last principal payment has been received. This is referred to as an installment sales contract or a contract for a deed.
Landlocked
Completely shut in by adjoining parcels of land with no access to public roads.
Landlord/Lessor – Arrendador
The owner of property (as land, houses, or apartments) that is leased or rented to another.
Latent Defect
A defect which cannot be discovered by ordinary inspection.
Lease – Arrendamient, Comodato
An agreement by which a landlord gives the right to a tenant to use, and to have exclusive possession, but not ownership of realty, for a specified period of time, in consideration for the payment of rent.
Lease Purchase Agreement
An arrangement whereby part of the rent payment is applied to the purchase price, and when the prearranged total amount has been paid, title is transferred.
Leasehold
The interest that the tenant has created by a lease.
Legal Description
A written description of a parcel of land which locates it precisely and will hold up in court. (Does not include address.)
Lender – Prestanista
The person or institution that lets out (money) for temporary use on condition of repayment with interest.
Less than Freehold Estate
Estates in possession generally referred to as leaseholds. Considered to exist for a definite period of time, or successive periods, of time until terminated by notice; also know as non-freehold estates.
Lessee
Tenant.
Lessor
Landlord.
Letter of Termination of Construction – Carta de Terminacion de Obra
The document from the Tax Department stating there is no further work or additions to be added to the property and that construction has ceased.
Leverage
Using borrowed capital to finance the purchase of real estate or other assets. (No money down)
License
A personal privilege to go upon the land of another; not considered an interest in land. Permission only to use.
Lien - Gravamen
A legally recognized right to enforce a claim or charge on the property of another for payment of some debt, duty or obligation.
Lien Theory State
The mortgage merely creates a lien right on the mortgagee with the mortgagor retaining the title.
Limited Partnership
An entity with a general partner, and one or more passive investors, called limited partners.
Liquidated Damages
An agreed-to sum, which will be paid if the contract is breached.
Liquidity
The ease with which an asset may be converted into cash.
Lis Pendens - Lis Pendens
A notice filed for he purpose of serving constructive notice that title, or some matter involving particular real property, is in litigation.
Listing Contract – Contracto de Prestacion de Servicios Profesionales
An employment agreement between an owner and broker defining the duties and rights of both parties. (Unilateral contract)
Loan – Emprestito, Prestamo
Money lent at interest.
Loan-to-Value Ratio
The relationship between the amount borrowed and the appraised value of the property. (Purchase price 100,000-Loan 80,000-LTV 20,000)
Lot and Block
A method of land description frequently used after land has been subdivided into building lots; also referred to as the recorded plat method. (Must have a plat map to find the property)
Loyalty
The duty owed by an agent, to avoid conflicts of interest or any activity which is detrimental to a principal.
Management Agreement
An employment contract between the owner of real estate and a property management firm that agrees to oversee the management of the property.
Market
The economic function of bringing buyers and sellers together through the price mechanism.
Market Data Approach
A means of estimating value by comparing similar properties. Used when there is an active market and where comparables can be identified. Also called comparable sales approach.
Market Value – Valor de Mercado
The price at which a willing buyer and a willing seller will agree upon, where neither is under any undue pressure, and both are negotiating at arms length with complete knowledge of the market.
Marketable Title
One which is free from reasonable doubts or objections, and which the courts would compel a purchaser to accept under the terms of a sales contract.
Master Plan
A program for the future development of a community which serves as the guideline for capital expenditures.
Metes and Bounds – Medidas y Colindancias
A method of land description which involves identifying distances and directions and makes use of both the physical boundaries and measurements of the land. MEXICAN ASSOCIATION OF REAL ESTATE PROFESSIONALS - ASOCIACION MEXICANA DE PROFESIONALES INMOBILIARIOS (AMPI)
AMPI is the largest Real Estate Association in Mexico, founded in 1957 in Mexico City, with 20 members. Today has over 1,000 members and represents about 10,000 practitioners through the country. AMPI include: Appraisers, Developers, councilors and Brokers, which are subject to our By laws and adopted our code of ethics.
Minor
An infant; one who has not attained majority in a state and does not have legal capacity to be bound by most contracts. (Voidable contracts)
Ministry of Foreign Affairs Permit – Permiso de la Secretaria de Relacions Exteriones, pare Establecere el Fideicomiso
The document notifying the Mexican government of a foreigners purchase of property in a restricted zone.
Misrepresentation
An innocent or negligent mis-statement of a material fact, detrimentally relied upon by the other party.
Month-to-Month Tenancy
A lease which has a term of one month but renewable for successive months at the option of both parties.
Monument
Physical evidence of a point- of- beginning established by surveyors for use in locating parcels of land.
Mortgage - Hipoteca
A legal document used to secure the performance of an obligation, in which the borrower or mortgagor agrees to pledge property to secure the debt represented by the promissory note. (A contract).
Mortgage Banker
A financial middleman who, in addition to bringing the borrower and the lender together, makes loans, packages them, and sells the packages to both primary and secondary investors. Also services loans.
Mortgage Broker
A person who brings together the user of capital (borrower) and the supplier of capital (lender). For this service, a finder's fee is usually paid by the borrower.
Mortgagee
A lender who receives a pledge of property to secure a debt.
Mortgagor
A borrower who pledges property through a mortgage to secure a debt.
Multiple Listing Service (MLS) – LISTA DE SERVICIOS MULTIPLES
Marketing service in which many brokers pool all of their listings and establish procedures for sharing commissions.
Mutual Assent
An offer and acceptance which together form the terms of a contract.
Negative Amortization
Some adjustable rate mortgages allow the interest rate to fluctuate independently of a required minimum payment. If a borrower makes the minimum payment it may not cover all of the interest that would normally be due at the current interest rate. In essence, the borrower is deferring the interest payment, which is why this is called "deferred interest." The deferred interest is added to the balance of the loan and the loan balance grows larger instead of smaller, which is called negative amortization.
Net Income, Net Operating Income Gross income less all operating expenses. Is used in the income approach to value. Net Listing The broker agrees to sell the property in order to achieve a net price to the owner, and anything which is received above the net price is the broker's commission. A net listing is prohibited by the licensing law in many states. Nonconforming Use
A pre-existing use of land which does not conform to the zoning ordinance but which may legally remain.
Notary Public
A person with the authority to take oaths and acknowledgments in the United States.
Note
A signed instrument acknowledging the existence of a debt and the promise to pay.
Note Rate
The interest rate stated on a mortgage note.
Notice – Aviso The Condition of being warned.
Notice of Default
A formal written notice to a borrower that a default has occurred and that legal action may be taken
Novation
Occurs when the person in a contract, to whom the duty was owed, expressly agrees to substitute the delegate, or new obligor, for a consideration, and agrees to discharge the old obligor from the obligations under the contract. For example, loan assumptions and cession of Rights.
Null and Void
Invalid and unenforceable.
Obsolescence
A loss in value because of a decrease in the usefulness of property due to decay, changes in technology or people's behavior patterns and taste.
Offer and Acceptance – Oferta y Aceptar
The necessary elements of mutual assent; for example, an agreement of one party to buy and another party to sell.
Offer to Purchase – Carta de Intencion
A contract whereby a buyer conveys his intent to purchase a property.
Official Translator – Perito Traductor
A person licensed to translate documents by the Superior Court of Justice.
Open Listing
An agreement between an owner and many brokers. If a broker produces a ready willing, and able buyer, a commission is due. However, the owner still has the right to sell his/her property and is not obligated to pay a commission to anyone.
Open-End Mortgage
A loan containing a clause which allows the mortgagor to borrow additional money without rewriting the mortgage.
Option
A right which is given for consideration to a party (optionee) by a property owner (optionor) to purchase or lease property within a specified time, at a specified price and terms. An option is irrevocable by the optionee and will not be extinguished by death or insanity of either party.
Optionee
The holder of the option. Buyer
Optionor
The seller of the option.
Ordinance A statute enacted by the legislative branch of a local government.
Original Principal Balance
The total amount of principal owed on a mortgage before any payments are made.
Origination Fee
On a government loan the loan origination fee is one percent of the loan amount, but additional points may be charged which are called "discount points." One point equals one percent of the loan amount. On a conventional loan, the loan origination fee refers to the total number of points a borrower pays.
Outbuilding
An accessory structure other than the main structure on land.
Owner – Dueno, Propietario
The person in whom is vested the ownership, dominium, or title of property; proprietor.
Owner Financing
A property purchase transaction in which the property seller provides all or part of the financing
Owner's Title Policy
A policy insuring the owner of real estate against certain defects of title.
Ownership
The right to hold, possess, control and dispose of property.
Ownership in Severalty
Individual ownership.
Package Mortgage
A mortgage, used in the purchase of a new residential property which, in addition to real property, covers certain personal property items and equipment. (Washer, dryer, drapes, refrigerator, stove)
Parol Evidence Rule
A rule of evidence designed to achieve a degree of certainty in a transaction and to prevent fraudulent and perjured claims. Although the word parol means oral, in this context, it refers to evidence that is extrinsic to, or outside and separate from, the writing. (Must be in writing to be enforceable in court)
Partial Payment
A payment that is not sufficient to cover the scheduled monthly payment on a mortgage loan. Normally, a lender will not accept a partial payment, but in times of hardship you can make this request of the loan servicing collection department.
Partial Release Clause A part of a mortgage, which provides for the release of part of the property (used as security in the loan) upon payment of a certain amount of the mortgage. Blanket mortgage. Partially Amortized Mortgage
A method of loan repayment in which the balance of the outstanding loan is not zero at maturity, and thus a balloon payment is due at that time.
Participation Mortgage
An agreement between a mortgagee and a mortgagor which provides the lender with a certain percentage of ownership in the project once the lender makes the loan.
Partition suit
The dividing of real estate held by two or more people which results in each of the parties holding individual or severalty ownership. (Tenants in common and joint tenants)
Payment Change Date
The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment mortgage (GPM). Generally, the payment change date occurs in the month immediately after the interest rate adjustment date.
Percentage Lease
The lessor receives a percentage of the gross sales or net profits as the rental payment for the lease of the property.
Percolation
Ability of soil to absorb water; used for septic systems.
Periodic Payment Cap
For an adjustable-rate mortgage where the interest rate and the minimum payment amount fluctuate independently of one another, this is a limit on the amount that payments can increase or decrease during any one adjustment period.
Periodic Rate Cap
For an adjustable-rate mortgage, a limit on the amount that the interest rate can increase or decrease during any one adjustment period, regardless of how high or low the index might be.
Periodic Tenancy
A lease, which has the original terms automatically renewed for successive periods, until proper notice to terminate is given by either the landlord or tenant. Month to month rental.
Permit – Gestoria
The document that allows consent to expressly or formally do an act.
Personal Property – Bienes Muebles
Movables, which are not annexed to or part of, the land; also referred to as chattels.
Physical Deterioration
The loss in value due to wear and tear of the structure.
PITI
An abbreviation which means "Principal, Interest, Taxes and Insurance." In residential financing, it is common for the monthly mortgage to include these four payments.
PITI reserves
A cash amount that a borrower must have on hand after making a down payment and paying all closing costs for the purchase of a home. The principal, interest, taxes, and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.
Planned Unit Development (PUD)
A project or subdivision that includes common property that is owned and maintained by a homeowners' association for the benefit and use of the individual PUD unit owners.
Planning Commission
A local government agency which determines plans for the physical growth of a community.
Plat
A map showing the division of land into lots and blocks.
Plottage
Occurs when two or more sites are combined, with the result that the value of the assembled site is worth more than the value of the sum of each of the individual sites.
PMI
Private Mortgage Insurance.
Point
A point is 1 percent of the amount of the mortgage.
Police Power
The inherent power of the state to regulate in order to promote public health, safety, morality or welfare. For example, zoning and building codes.
Policy (Insurance) – Poliza
The coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.
Possession
The physical control of real property.
Power of Attorney – Poder Nacional
A legal document that authorizes another person to act on one’s behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.
Pre-Approval
A loosely used term which is generally taken to mean that a borrower has completed a loan application and provided debt, income, and savings documentation which an underwriter has reviewed and approved. A pre-approval is usually done at a certain loan amount and making assumptions about what the interest rate will actually be at the time the loan is actually made, as well as estimates for the amount that will be paid for property taxes, insurance and others. A pre-approval applies only to the borrower. Once a property is chosen, it must also meet the underwriting guidelines of the lender. Contrast with pre-qualification.
Premium (Insurance) – Prima The consideration paid for a contract of insurance.
Prepayment
Any amount paid to reduce the principal balance of a loan before the due date. Payment in full on a mortgage that may result from a sale of the property, the owner's decision to pay off the loan in full, or a foreclosure. In each case, prepayment means payment occurs before the loan has been fully amortized
Prepayment Penalty
The charge levied by the lender for paying off a mortgage prior to its maturity date.
Pre-Qualification
This usually refers to the loan officer’s written opinion of the ability of a borrower to qualify for a home loan, after the loan officer has made inquiries about debt, income, and savings. The information provided to the loan officer may have been presented verbally or in the form of documentation, and the loan officer may or may not have reviewed a credit report on the borrower.
Prescription
A means of acquiring title to property through open and continuous use.
Prescriptive Easement
An easement obtained by the open, notorious, hostile and continuous use of the property belonging to someone else for a statutory period of time.
Preventative Notice – Noticacion de Prevencion
The document filed at the Public Registry notifying all interested parties that a transaction is pending on a specific property. Duration is generally 30 days.
Price - Precio
An amount usually expressed in terms of money paid for property.
Prime Rate
The interest rate that banks charge to their preferred customers. Changes in the prime rate are widely publicized in the news media and are used as the indexes in some adjustable rate mortgages, especially home equity lines of credit. Changes in the prime rate do not directly affect other types of mortgages, but the same factors that influence the prime rate also affect the interest rates of mortgage loans.
Principal - Capital
The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage.
Principal Balance
The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges. See remaining balance.
Principal, Interest, Taxes, and Insurance (PITI)
The four components of a monthly mortgage payment on impounded loans. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage and hazard insurance.
Private Mortgage Insurance
A private insurance program which insures the lender for loan amounts in excess of 80% of value.
Pro-rata - Proratas
To divide or distribute proportionately.
Probate
The process of proving a will before a duly authorized court or person.
Procuring Cause
The actions by a broker which result in the owner being able to make a sale.
Project – Proyecto
The plan to develop a property.
Promise to Trust – Contrato de Promesa
A promissory agreement that is executed once both parties have agreed to the basic conditions to purchase the property. It is used when there is a delay between the execution of the offer and acceptance and the execution of the final transfer.
Promissory Note – Pagare, Contrato de Promesa
The primary legal financing obligation in which the borrower promises to pay back a sum of money borrowed. (A contract)
Property – Propiedad
The rights of ownership in lands or goods. Land.
Property Tax Registration Number – Clave Catastral
The number the government assigns to a taxable parcel of land.
Property Taxes – Impuestos Predial
The amount of tax levied on a piece of real estate.
Proration - Proratas
Dividing property taxes, hazard insurance and other expenses or income between the buyer and seller, as of date of settlement.
Public Auction
A meeting in an announced public location to sell property to repay a mortgage that is in default.
Public Deed – Escritura Publica
A public instrument.
Public Notary – Notario Publico
Under Mexican law, only Notaries are authorized to prepare and record a property deed. Notaries are attorneys appointed by the state government to specialize in various matters (including real estate transactions). Notaries are also responsible for collecting taxes at closing. Public Registry of Property/Catastro – Registro Publico de la Propiedad
The Public Registry of Property is the central recording entity for all public documentation concerning property. In order to ensure its ownership rights against the seller and third parties, a buyer must record all property transfer at the Public Registry of Property for the jurisdiction in which the property is located. (Timeshare acquisitions are the lone exception to this recording requirement.) Notaries typically handle registration. Public Report – Reporte Publico
The Public Report is considered both a “license for a developer to offer” Mexican property for sale in Arizona and a public information statement providing valuable information to the buyer.
Puffing
To exaggerate - for example, to refer to a house as having "the most gorgeous view in the city."
Purchase – Compra
To acquire (real estate) by means other than descent or inheritance, to obtain by paying money or its equivalent.
Purchase Agreement – Contracto Compra y Venta
A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.
Purchase and Leaseback
The simultaneous buying of property and leasing it back to the seller.
Purchase Money Mortgage
A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing.
Purchase Money Transaction
The acquisition of property through the payment of money or its equivalent.
Purchase Option – Opcion de Compra A contract conveying a right to buy designated securities, commodities, or property interest at a specified price during a stipulated period.
Qualifying Ratios
Calculations that are used in determining whether a borrower can qualify for a mortgage. There are two ratios. The "top" or "front" ratio is a calculation of the borrower’s monthly housing costs (principle, taxes, insurance, mortgage insurance, homeowner’s association fees) as a percentage of monthly income. The "back" or "bottom" ratio includes housing costs as will as all other monthly debt.
Quiet Enjoyment
The right of an owner or lessee legally in possession of property, to uninterrupted use of the property without interference from the former owner, lessor or any third party claiming superior title.
Quiet Title
A court action to remove a cloud on the title.
Quitclaim Deed
A deed that transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made.
Rate – Tasa A fixed ratio between things, or price fixed according to a ratio, scale or standard.
Rate Lock
A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time at a specific cost.
Rate of Return A percentage relationship between the investment price or equity invested and the composite returns. Real Estate – Bienes Raices, Bienen Inmuebles
Land and anything permanently affixed to it, including buildings.
Re-entry
The right of the landlord to repossess leased property following the violation of the terms in the lease.
Ready, Willing and Able
Someone fully qualified to enter into a transaction.
Real Estate - Fincas
Land and all man-made improvements both on and to the land, plus all tangible interest in the real property. Surface, subsurface and air rights.
Real Estate Agent – Agente de Bienes Raices o Agente Inmobiliario
A person licensed to negotiate and transact the sale of real estate.
Real Estate Commission
The state regulatory body whose duty it is to carry out the real estate license laws in a particular state.
Real Estate Investment Trust (REIT)
A method of pooling investment money using the trust form of ownership if certain tax requirements are met. One advantage of the REIT is the avoidance of corporate tax (thus no double taxation) + many more.
Real Estate Market
The mechanism by which rights and interests in real estate are sold, prices set, supply adjusted to demand, space allocated among competing alternate uses, and land-use patterns set.
Real Estate Settlement Procedures Act (RESPA)
A law which covers most mortgage loans made for one to four-unit residential property. It requires the lender to provide the loan applicant with pertinent information so that the borrower can make informed decisions as to which lender will be used to finance the purchase.
Real Estate Tax Registry – Direccion de Catastro
The land registry office.
Real Property
Refers to land and improvements both on and to the land, and also to the physical aspects of real estate, including surface, air and subsurface rights plus, bundle of rights.
REALTOR®
A registered trademark of the NATIONAL ASSOCIATION OF REALTORS. It is used by brokers and salespersons who hold active membership in the association.
Receipt – Recibo
Written acknowledgment of the receipt of money, or delivery of a thing of value, without containing any affirmative obligation upon either party to it; a mere admission of a fact, in writing.
Receiver
A court-appointed person who is charged with preserving a property, collecting rents and doing anything necessary to maintain the property's condition.
Reciprocity
The recognition that states give whereby a licensee of one state can be involved in real estate transactions in other states.
Reconveyance – Retransferencia
The act of to convey back to a previous position or owner.
Recorder
The public official who keeps records of transactions that affect real property in the area. Sometimes known as a "Registrar of Deeds" or "County Clerk."
Recording – Registrar The noting in the registrar’s office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, thereby making it a part of the public record
Rectangular Survey
Method of land description used in about 30 states based on imaginary lines of longitude (meridians) and latitude (base lines); also referred to as the US government survey system.
Redemption Period
The right of a mortgagor (borrower) to make good on the default within a specified time and receive the property back.
Redlining
The practice of some lending institutions that restricts the number of loans or the loan-to-value ratio in certain areas of a community, i.e., it is illegal for a lending institution to require a higher down payment because the home the borrower is buying is located in a racially mixed area.
Refinance Transaction
The process of paying off one loan with the proceeds from a new loan using the same property as security.
Refinancing
A description of an extension of the existing financing either through the same lender or through a new financial arrangement.
Registry – Registro
A register, or book authorized or recognized by law, kept for the recording or registration of facts or documents.
Regulation Z
Issued by the Federal Reserve System to implement the Truth-In-Lending Law (National Consumer Credit Protection Act). Applies to credit and interest rates.
Regulation Z Issued by the Federal Reserve System to implement the Truth-In-Lending Law (National Consumer Credit Protection Act). Applies to credit and interest rates.
Issued by the Federal Reserve System to implement the Truth-In-Lending Law (National Consumer Credit Protection Act). Applies to credit and interest rates.
Release – Cancelacion de Credito
To give up in favor of another
Remaining Balance
The amount of principal that has not yet been repaid. See principal balance.
Remaining Term
The original amortization term minus the number of payments that have been applied.
Remainder-man
The person who has a future interest in a life estate once the present estate terminates.
Renegotiable Rate Mortgage
A renegotiated loan where the maturity is fixed (for example, 30 years) but the interest rate, and hence the monthly payment, is renegotiated periodically (for example, every 3 or 5 years.)
Rent - Alquilar
The payment made for the use of land.
Rent Loss Insurance
Insurance that protects a landlord against loss of rent or rental value due to fire or other casualty that renders the leased premises unavailable for use and as a result of which the tenant is excused from paying rent.
Repayment Plan
An arrangement made to repay delinquent installments or advances.
Replacement Cost
The cost of substituting a similar structure with utility equivalent to the subject property but constructed with modern materials.
Replacement Reserve Fund
A fund set aside for replacement of common property in a condominium, PUD, or cooperative project -- particularly that which has a short life expectancy, such as carpeting, furniture, etc.
Reproduction Cost
The cost of exactly duplicating a structure using the same material and design. Resale – Reventa
Exists where a person who has sold goods or other property to a purchaser sells them again to someone else.
Rescission
Repealing a contract either by mutual consent of the parties to the contract or by one party when the other party is in breach of the contract.
Resident Manager
An employee of the property management firm and its representative on the premises.
Restriction – Restriccion
Any limitation on the use of property.
Restricted Zone - Zona Restringida
The Mexican Constitution regulates the ownership of the land and establishes that " . . . in a zone of 100 kilometers along the border or 50 kilometers along the coast, a foreigner cannot acquire the direct ownership of the land". These areas are known as the "Restricted or Prohibited Zones".
Restrictive Covenant
A clause in a deed which restricts use of property for a specified time.
Reversion
A future interest in the grantor, which occurs whenever the owner of real estate conveys an estate of lesser duration than the owner has.
Reversionary Interest
A future interest a person has in property after present possession is terminated.
Revocation
The nullification of an offer to contract by the original offeror.
Revolving Debt
A credit arrangement, such as a credit card, that allows a customer to borrow against a preapproved line of credit when purchasing goods and services. The borrower is billed for the amount that is actually borrowed plus any interest due.
Right – Derecho In a narrower signification, an interest or title in an object of property; a just and legal claim to hold, use, or enjoy it, or to convey or donate it, as he may please.
Right of First Refusal – Tanto de Derecho
A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he or she offers it for sale or lease to others.
Right of Ingress or Egress
The right to enter or leave designated premises.
Right of Ownership – Derechos de Propiedad The right to have or hold as property
Right of Re-entry
The right retained when a fee simple on condition subsequent exists; also referred to as the power of termination.
Right of Redemption
The legal ability to buy back one's property within the time specified in each state after a judicial sale by paying the debt, interest and certain costs.
Right of Survivorship
Upon the death of a joint tenant or tenant by the entirety the interest does not pass to the tenant's heirs but to the other join tenant(s).
Riparian Rights
A legal right of a landowner who owns land next to a natural watercourse to reasonable use of whatever water flows past the property.
Run with the land
Certain restrictions, easements and covenants are part of the ownership of land and thus are not terminated when title is transferred but remain in effect from owner to owner.
Rural Property – Finca Rustica
All real estate located outside the city limits
Sale-leaseback
A technique used by owners of property as a means of raising capital. The process involves the simultaneous selling and leasing back of the property usually through a net lease.
Sales Contract - Compraventa
An agreement in which the buyer and seller agree to the terms and conditions of the sale of property. (Bilateral Contract)
Salesperson
A natural person licensed to perform on behalf of any licensed real estate broker any act or acts authorized to be performed by the broker.
Satisfaction of Mortgage
An instrument issued by the mortgagee (Lender) when the mortgage has been paid in full.
Satisfaction Piece
An instrument issued by a person holding a lien to indicate lien is discharged.
Scarcity
The scarcity of real estate refers to the limited supply of certain types of real estate at particular locations.
Second Mortgage
A mortgage subordinate to a first mortgage; also referred to as a junior mortgage. (Recorded Second)
Secondary Market
The buying and selling of existing mortgages, usually as part of a "pool" of mortgages.
Secured Loan
A loan that is backed by collateral
Security
The property that will be pledged as collateral for a loan.
Seisin
The actual possession of land by one who claims rightful ownership of a freehold estate therein.
Seller– Vendedor
Vendor: one who has contracted to sell property.
Seller Financing – Venta Financiada An agreement in which the owner of a property provides financing, often in combination with an assumable mortgage
Servicer
An organization that collects principal and interest payments from borrowers and manages borrowers’ escrow accounts. The servicer often services mortgages that have been purchased by an investor in the secondary mortgage market.
Servicing
The collection of mortgage payments from borrowers and related responsibilities of a loan servicer.
Servient Estate The tract of land burdened by an easement.
Setback Lines
A requirement in zoning ordinances in which all structures are to be a minimum distance from property lines.
Settlement Statement
A document that provides an itemized listing of the funds that were paid at closing. Items that appear on the statement include real estate commissions, loan fees, points and intial escrow amounts.
Severalty Ownership
Ownership by one person.
Site
A lot ready for development.
Situs
Refers to the economic location of real estate.
Special Agent
One limited in authority to transact a single business affair or a specific series of business affairs or to perform restricted acts for the principal. (Listing one property for sale)
Special Assessment
From time to time jurisdictions levy a charge on certain pieces of property for the purpose of paying for the cost of a public a improvement such as sewers or sidewalks, which particularly benefit properties being assessed as opposed to those improvements benefiting the public at large. Considered a tax.
Special Warranty Deed
The grantor warrants against defects that have occurred after the grantor acquired title. (No warrantee forever-only for the time the grantor owns the property)
Specific Lien
One that attaches to a particular property.
Specific Performance
An equitable remedy in which the court orders the contract to be performed as agreed to by the parties.
Statute
A law passed by a state legislature.
Statute of Frauds
Every state has some form of laws which require that certain contracts must be in writing in order to be enforceable in a court.
Statutory Period of Redemption
The time within which property may be redeemed after a foreclosure sale.
Steering
The channeling of prospective home purchasers or renters, by real estate brokers or salespersons, into racially homogeneous neighborhoods, and actively discouraging them away from neighborhoods of different racial or ethnic composition.
Straight Note
A promissory note evidencing a loan in which payments of interest only are made periodically during the term of the note, with the principal payment due in one lump sum upon maturity. A straight note is usually a non-amoritized note made for a short term, such as two to 4 years, and is renewable at the end of the term. A mortgage that secures a straight note is a term mortgage or straight-term mortgage.
Straw Man – Prestanombre
A person who is set p as a cover or a front for a questionable enterprise; the use of a Mexican corporation, as a front for a foreigner, to take title of property in the restricted zone in violation of the law.
Street – Calle
A thoroughfare especially in a city, town, or village that is wider than an alley or lane and that usually includes sidewalks
Subdivision - Fraccionamiento
A housing development that is created by dividing a tract of land into individual lots for sale or lease.
Sublease
The transfer when the original lessee retains a reversion. Primary liable. Remains with the original lessee.
Subordinate Financing
Any mortgage or other lien that has a priority that is lower than that of the first mortgage.
Subordination Clause
A clause in which the holder of a mortgage permits a subsequent mortgage to take priority. Subordination is the act of yielding priority.
Subrogation
The substitution of a third person in place of a creditor to whose rights the third person succeeds in relation to the debt. (Title company)
Supplier – Proveedor
An individual or corporation that customary or periodically offers, distributes, sells, rents or concedes the use or enjoyment of property, products or services.]
Suit
A court action to enforce a legal claim or right.
Survey - Traspaso
A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.
Surveyor - Topographo One whose occupation is surveying land.
Sweat Equity
Contribution to the construction or rehabilitation of a property in the form of labor or services rather than cash.
Syndicate
An arrangement to raise equity capital for real estate purchases or for other types of investments.
Tax – Impuesto
To levy an assessment against, usually by government powers. Unpaid taxes usually form a special lien on property owned by the taxpayer, ahead of registered mortgages. The money charged as an assessment
Tax Base
The total tax-assessed value of all real property in a particular jurisdiction.
Tax Rate
The rate, normally stated in units of $100, multiplied by the assessed value of property to determine the amount of the property tax due.
Tax Stamps – Timbres Fiscales
A seal or official stamp used to certify that the duty or tax has been paid.
Taxation
The right of government to require contribution from citizens to pay for government services.
Tenancy at Sufferance
A tenancy which is created when one is in wrongful possession of realty, even though the original possession may have been legal.
Tenancy at Will
An occupation of space for an indefinite period which can be terminated by either the lessor or lessee at any time.
Tenancy by the Entireties (Entirety)
A special joint tenancy between a lawfully married husband and wife, which places all title to property (real or personal) into the marital unit, with both spouses having an equal undivided interest in the whole property. In essence, each spouse owns the ENTIRE estate.
Tenancy from Period to Period
A leasehold, which is automatically renewed for the same term as in the original lease; also referred to as a periodic tenancy or an estate from year to year. Notice needed to terminate.
Tenancy in Common
A form of concurrent ownership where two or more persons hold separate titles in the same estate. May have equal or unequal shares. Right of partition.
Tenant/Lessee – Arrendatario
One who has the occupation or temporary possession of lands or tenements of another; specifically : one who rents or leases (as a house) from a landlord.
Term Mortgage (Straight Term)
A method of financing in which interest only is paid during the time of the loan. At maturity, generally five years or less, the entire principle is due.
Third Party – Tercero
One not a party to an agreement, a transaction or an action, but who may have rights therein.
Third-Party Origination
A process by which a lender uses another party to completely or partially originate, process, underwrite, close, fund, or package the mortgages it plans to deliver to the secondary mortgage market.
Time Is of the Essence
A phrase included in contracts to require punctual performance of all obligation.
Timeshare Rights – Derechos de Tiempo Compartido
Timeshare rights (as opposed to real property rights) are contractually acquired interests to use property according to the terms of the relevant timeshare purchase contract.
Time Sharing
A form of condominium ownership in which the buyer owns the property for a certain specified time interval.
Title - Titulo
The legally recognized evidence of a person's right to possess property.
Title Company
A company that specializes in examining and insuring titles to real estate.
Title Insurance – Seguro de Titulo
A policy that protects the insured against loss or damage due to defects in title.
Title Search
A check of the title records to ensure that the seller is the legal owner of the property and that there are no liens or other claims outstanding.
Title Theory States
States in which a mortgage actually conveys title subject to a condition.
Topography
A description of surface features of land.
Township
A 6-by-6 mile area containing 36 sections each 1 mile square. A division of land in the rectangular survey method of land description.
Trade Fixtures
Personal property used in business which has been annexed to real property and is removable by the owner. (Tenant) If it is not taken by the tenant it becomes the property of the landlord.
Transfer – Transferencia, traspaso
An act of the parties, or of the law, by which the title to property is conveyed from one person to another.
Transfer Tax – Impuesto de Traspaso
A tax charged to convey interest in property from one party to another.
Transferability
The ability to exchange goods and services. In real estate legal rights are transferred.
Transfer of Ownership
Any means by which the ownership of a property changes hands. Lenders consider all of the following situations to be a transfer of ownership: the purchase of a property "subject to" the mortgage, the assumption of the mortgage debt by the property purchaser, and any exchange of possession of the property under a land sales contract or any other land trust device.
T rust - Fideicomiso
A legal relationship under which title to property is transferred to a person, called a trustee, who has control over the property, and must manage it for some other person -- called a beneficiary.
Trustee - Fiduciario
A person who holds title and control over property and manages it for another person called a beneficiary. (Called "Naked Legal Title")
Trustor – Fiduciante, Fideiconiitente
The person who creates a trust and voices the instructions to the trustee. (The borrower.)
Truth-in-Lending Law
Common name given to the National Consumer Credit Protection Act. Requires lenders to make credit disclosures to individual borrowers for certain types of loans. (Regulation Z)
Undivided Interest
The interest of co-owners in which individual interest is indistinguishable. (Everyone owns part of the whole property.)
Undue Influence
Occurs when a person in a fiduciary capacity or in a position of authority misuses the trust or power in order to unfairly induce a party to enter into a contract.
Unencumbered Property
Property that is free and clear of any liens.
Unities
Joined in one; for example, in order for a joint tenancy to exist four unities are necessary (1) time, (2) title, (3) interest and (4) possession. (TTIP)
Unity of Possession
The right of each tenant to the possession and use of the whole property. (Joint tenants and tenants in common.)
Unity of Time
States that the joint tenancy interests of the joint tenants must have been acquired at the same moment.
Unity of Title
States that the joint tenancy interests were created in a single conveying instrument.
Universal Agent
Has the authority to do all acts that can be lawfully delegated to a representative. (Power of attorney-attorney in fact)
Unsecured Loan
A loan made on the signature and credit of the borrower, not secured by collateral. Credit card. (Debenture)
Urban Property – Finca Urbana
Refers to property locatd inside the city limits.
Urban Renewal
The acquisition of certain areas by government action for the purpose of redevelopment.
Usury
Charging more than the legal rate of interest for the use of money.
VA Mortgage
(GI Mortgage) Mortgage guaranteed by Veterans Administration.
Vacant Property – Bienes Vacantes
Real or immovable property that has no certain and known owner.
Valid Contract
A binding agreement containing all of the essential legal elements.
Valuable Consideration
Anything of value offered as an inducement. (Money, ring, boat, etc.)
Value Added Tax – Impuesto sobre Valor Agregado
Commonly known as IVA, a tax added to all goods and services in Mexico.
Variable Interest Rate Mortgage (VRM)
The interest rate charged by the lender varies according to some index not controlled by the lender.
Variance
A type of safety valve to allow a property owner, who is unfairly burdened by zoning restrictions, to find relief.
Vendee
Purchaser in a contract for deed.
Vendee's Lien
Held by the purchaser for the purchase price paid if the seller defaults on the delivery of the deed.
Vendor
Seller in a contract for deed.
Vendor's Lien
The amount of the purchase price still due to the seller.
Veterans Administration (VA)
An agency of the federal government created to provide a loan guaranty program which enables qualified veterans to finance real estate purchases with a higher loan-to-value ratio than is normally possible with conventional financing.
Voidable Contract
An agreement in which one or more of the parties may elect to avoid or to ratify the legal obligations created by the contract. Minor, someone under duress.
Voluntary Alienation
The transfer of title by a deed.
Voluntary Lien
An encumbrance placed on property through some willful act of the owner.
Warranty Deed
A deed in which the grantor makes formal assurance as to quality of title.
Water Rights
The right of a landowner to water adjoining or passing through property.
Water Table
The distance from ground level to natural groundwater.
Wear and Tear
The lessening in value of an asset due to ordinary and normal use.
Will
A legal declaration in which a person disposes of property to take effect upon his or her death.
Wrap-around Mortgage
A junior mortgage which provides an owner additional capital without refinancing the first mortgage. (The original mortgage is not disturbed)
Writ of Execution
A court order to an officer to carry out judicial decree.
Yield
The interest earned by an investor on the investment.
Zoning
A police power device which allows for legislative division of space into districts and imposition of regulation prescribing use and intensity of use to which land within each designated district may be put.
Zoning Ordinance
A zoning law passed by a local government which consists of a text of regulations and a map.
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